France's Richest Man Ends Belgian Move After Tax Furore

Thursday, 11 Apr 2013 | 1:47 AM ETReuters

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Francois Guilllot | AFP | Getty Images

Luxury group LVMH CEO Bernard Arnault.

Bernard Arnault, France's richest man, has abandoned attempts to obtain Belgian nationality and will keep paying tax in his native country after months of speculation that he, like movie star Gerard Depardieu, wanted to dodge a 75-percent supertax.

The head of the LVMH luxury goods empire, whose citizenship request looked doomed, announced his decision in a newspaper interview, saying he had never intended to flee the taxman.

Arnault's request for Belgian nationality appeared in doubt after a Brussels court in January handed down a negative opinion on it to the Office of Foreigners immigration office, Belgian media quoted the office's spokesman as saying.

Arnault said his frustrated efforts to acquire nationality in Belgium were motivated not by tax concerns but a desire to tie up legal ownership issues so that his children would not fight over the riches he would one day leave to them.

"Given the situation the country is in, the recovery effort needs to be shared, and with this gesture I hope to show my attachment to France and confidence in its future," he said.

The LVMH chief executive said LVMH paid more than a billion euros in tax on profit in France, more than half of its total tax bill, even though 90 percent of its sales were abroad.

While refusing to reveal his personal tax bill he said he was "undoubtedly one of France's top taxpayers".

But after a top court slapped down the initiative, Hollande said in March he was modifying that plan to have companies pay the tax for employees paid more than a million euros, rather than have individuals paying it themselves.

Arnault said he had rejected moves by some of his employees to seek tax residence outside France.

"Some of them asked to be domiciled outside France but I resisted," he told Le Monde.

Actor Gerard Depardieu, the star of moves such as Green Card and Cyrano de Bergerac, was accused by French leaders last year of making a "pathetic" attempt to dodge the taxman when he bought a house across the border in Belgium.

He responded furiously, publicly accepting an offer of Russian citizenship from Russian President Vladimir Putin.

Arnault said the 75-percent tax would not raise a lot of revenue but should prove less divisive now that it was set to be levied on firms rather than people and only due to stay in place for two years.

France's premier football league says the tax will probably raise 82 million euros from its football clubs.